BIRLESIM_2021_ANNUAL REPORT

BİRLEŞİM MÜHENDİSLİK 2021 ANNUAL REPORT 156 Birleşim Mühendislik Isıtma Soğutma Havalandırma Sanayi Ticaret A.Ş. and Its Subsidiary (All amounts expressed in Turkish Lira (“TL”)) Notes to the Consolidated Financial Statements For the Year Ended 31 December 2021 2. BASIS OF PRESENTATION OF THE CONSOLIDATED FINANCIAL STATEMENTS (Continued) (k) Summary of Significant Accounting Policies Revenue Group recognizes revenue when the goods or services is transferred to the customer and when performance obligation is fulfilled. Goods is counted to be transferred when the control belongs to the customer.Group recognizes revenue based on the following main principles: - Identification of customer contracts, - Identification of performance obligations, - Determination of transaction price in the contract, - Allocation of price to performance obligations - Recognition of revenue when each performance obligation is satisfied. Group recognized revenue from its customers only when all of the following criteria are met: - The parties to the contract have approved the contract (in writing, orally or in accordance with other customary business practices) and are committed to perform their respective obligations, - Group can identify each party’s rights regarding the goods or services to be transferred, - Group can identify the payment terms for the goods or services to be transferred, - The contract has commercial substance, - It is probable that Group will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer. In evaluating whether collectability of an amount of consideration is probable, an entity shall consider only the customer’s ability and intention to pay that amount of consideration when it is due. The Group takes into account the contractual terms and commercial practices to determine the transaction price. The transaction price is the amount the Group expects to be entitled to in exchange for transferring promised goods or services to the customer, excluding amounts collected on behalf of third parties (for example, some sales taxes). The promised consideration in a contract with a customer can include fixed amounts, variable amounts, or both. If the price promised in the contract is a variable amount, the Group determines the amount that it will be entitled to collect in return for the transfer of the promised goods or services to the customer by estimation. In order for the Group to include some or all of the estimated variable price in the transaction price, it must be highly probable that there will not be a significant cancellation of the cumulative revenue received in the consolidated financial statements when the uncertainty regarding the variable price is subsequently eliminated. While assessing whether it is highly probable that there will not be a significant reversal of the cumulative revenue recognized when the uncertainty regarding the variable price subsequently clears, the Group considers both the probability and magnitude of the said revenue reversal.